Long Term Care Insurance: Is This Offer the Best Option for Me?
Recently, I was asked to review and evaluate a group life insurance available through a third-party connected with the person’s employer and which included long term care insurance benefits.
One important feature of this offer was no medical history or exam required.
This person wanted my recommendation because they have serious medical issues which have been disqualifying previously in obtaining an affordable individual long term care policy. They could also be excluded from other policies due to age range limits or the cost could be prohibitive.
A company is offering group life insurance with long term care benefits to eligible employees of companies who use their service; there would be no underwriting. This is a plus and could help in certain situations, particularly for people who may not qualify otherwise.
In evaluating any offer, in addition to understanding the requirements (who is included or excluded), you should also look at costs vs financial benefits.
Based on this employee’s age and the maximum policy available, which was $100,000 coverage for life insurance with long-term care benefits, the premium would be approximately $553.00 per month. The long term care benefits, if needed, would pay for approximately two years, capped per month and at a percentage of the life insurance benefit. At a cost of $6,636 per year, it is important to understand whether there is an end point for paying the premium. Otherwise, the benefits could be only available while paying the premium. Stop paying, and you could end up with zero benefits and no refunds. This policy did not have a premium limit.
Depending on your financial situation, you may be better off investing that money yourself. We can help you determine if there are other options for you.
Other important considerations would be whether the group life insurance policy with long term care benefits is portable–meaning you can take it with you if you leave the company or group–and also if the premiums when enrolled are guaranteed, so they won't increase.
Note: for this policy, long-term care benefits will deplete the life insurance benefits, and the premiums are not tax deductible.
For example, a long-term care insurance plan without life insurance attached could have a significantly lower premium, with the policy completely portable, and providing protection for a primary residence. Also, these premiums would be tax deductible, per federal law.
You can also obtain separate coverage for life insurance, if needed, so it doesn’t reduce using long term care insurance coverage.
One person’s situation is outlined here. Yours may be different. As an independent insurance agency, we are here to answer your questions and recommend the best and most affordable policy for you. We can help you work through your needs, including your medical history and your financials, and clear up any misconceptions you may have heard.
The factors we consider with you:
Your age
Your health history
Your family situation
Your assets, including whether you own a home
Your reasonable budget for coverage
We help you know all the options available to you. Your long-term care and life insurance coverage will be designed properly. We will be honest with you about costs and benefits. Reach out to us today to start your planning!